2 Common Mortgage Types: Which Option Do You Choose?

February 19, 2021 by Cindy Steelman

A home purchase can be one of the most fulfilling decisions you’ll ever make in your life, as a house is a significant investment. However, one of the biggest challenges you’ll encounter is when you don’t have enough finances to pay for this endeavor. If you don’t have money to pay for a new house in full, the most logical course of action is to get financing from a lending institution. This is where a mortgage comes into the picture.

A mortgage allows you to buy a house by seeking funding from a bank, financial institution, or a lender. It is a security instrument, wherein you’re obliged to pay regularly until your loan is paid back in full.

Buy a Home Tips in Roseville, CA

In this article, we will share two common types of mortgages that you can choose from:

Conventional loans. These mortgages are generally offered by private lenders, such as banks and other financial institutions, meaning that the federal government doesn’t insure them. Taking this option is ideal for borrowers with a good credit standing, stable employment or business, stable income, and minimal to zero debts. There are two types of loans that fall under this category, as follows:
- Conforming loan: As the name suggests, this loan conforms to financing limits set forth by the Federal Housing Finance Agency (FHFA). It is usually regulated by Fannie Mae and Freddie Mac, two agencies that typically buy most US mortgages for their portfolio as investors.
- Non-conforming loan: This loan operates above the conforming loan limits. The terms and conditions for this vary from one lender to another, but the mortgage rate is typically higher for the lender’s security. The most common type of non-conforming loan is the jumbo loan.
Non-conventional loans These mortgages are typically insured or backed by the government. However, keep in mind that the US government isn’t a mortgage lender, as it is only their way of helping Americans become homeowners. These loan types are ideal for those with lower income or less-than-perfect credit because they offer more flexibility in their loan features. Below are the three types that fall under this category:
- FHA loans: The Federal Housing Administration loans are usually back by the government agency. This is perfect for borrowers who don’t have enough down payment or don’t have a good credit standing. Its down payment typically ranges from three to ten percent, while the credit score required is 500 and above.
- VA loans: These loans are insured by the Veteran’s Administration (VA). They are programs designed for active-duty military members, reservists, and veterans to help them and their families finance a home. The good thing about these loans is that they require no down payment and mortgage insurance, but the credit score must be around 620 to qualify.
- USDA loans: USDA loans are backed by the United States Department of Agriculture, meant to help low-to-moderate income borrowers and develop rural communities. To qualify for this, you must purchase a home in a USDA-eligible area, meet certain income limits, and have a credit score higher than 620. As with VA loans, they require no down payment, although mortgage insurance is included.

Mortgage Broker in Roseville: Steelman Mortgages

A mortgage is indeed a viable solution when you want to buy and own a house in the future. Be sure to consider the common types of home loans discussed above, whether it’s conventional or non-conventional. Factor in all the loan features, weigh in your options, and then decide on a mortgage that best fits your circumstance. With all these in mind, you’ll be able to make a well-informed home purchase decision!

Are you looking for the right mortgage? You’ve come to the right place! As a mortgage broker in Roseville, we help individuals find the right home loan, whether buying a new house or refinancing a mortgage. Get in touch with us today at (916) 847-7263 to schedule an appointment with our loan officers!

3 Things to Avoid at All Costs During the Home Purchase Process

January 29, 2021 by Cindy Steelman

The home buying process can be complicated, as it’s composed of a variety of factors that need to be analyzed carefully. This includes the mortgage, most commonly referred to as a home loan. Various mortgage companies are across California, all ready to provide you with services. Before saying “yes” to any of them, however, you must first understand the process.

Understanding the process allows you to enter a contract that is better for you and your resources, and it also helps you assess if a broker can cater to your needs and preferences. Learning what happens during the sales process and closing, and any risks and pitfalls that you may unknowingly wander in, will help you a lot.

Things to Avoid During Home Purchase Process

For these reasons, preparation is key. It’s the blueprint for your dream home. To help you fully plan, we’ve curated a list of some things that could potentially harm your progress. Take a look at these crucial elements to avoid at all costs:

Shopping around without a pre-approval. If you begin looking around for homes without a pre-approval, you’ll likely either end up with a less than desirable home or perhaps go over budget. The pre-approval process has been designed to help homebuyers set a budget, allowing them to adjust expectations accordingly. Falling in love with a property beyond your means is always a trap and can potentially ruin your financial security in the long run. With a pre-approved mortgage, you know exactly what to expect and gauge, ultimately helping you narrow down the path towards the right home.
Engaging in big purchases. Making big purchases, such as a new car, can drastically affect your budget means. It’s not always easy to shell out huge sums of money for investments and doing so for a car and other high ticket items can lead to undesirable consequences. You can end up accumulating more debts possibly causing you to get rejected for your mortgage. Big purchases can also affect your overall credit score and rating, leading to negative consequences. You risk your mortgage application, either reducing your chances of getting a low-interest rate, or perhaps losing the option altogether. Golden tip: If it’s truly necessary to make a large purchase before your home purchase, make sure to plan for it accordingly. You’ll want to have full control over it, particularly since you need to think of long-term expenses.
Refusing to enlist the help of experts. While it can be incredibly tempting to do so, never attempt to do everything by yourself. You may feel like it’s worth a little less to avoid any form of assistance, but this will only cost you more in the long run. In the chaos of it all, you can easily miss crucial documents, fail to respond to requests, and so much more. Such mistakes can be costly in the long run, potentially leading to you miss out on your dream home. When it comes to the real estate market, time is always of the essence. With the help of professionals, you’ll be able to enjoy a smooth and convenient process—every step of the way.

Work with the Best Mortgage Lender in Roseville

The home buying process can be complicated, but with ample research and preparation, you’ll be able to properly protect yourself against potential pitfalls. This includes financial mistakes like big purchases, failing to get pre-approved, and of course, believing you don’t need the help of experts.

To make sure that you enjoy a smooth transaction, Steelman Mortgages is ready to help. We offer you the best possible home loans in Roseville, guaranteed to bring you one step closer to your dreams. Contact us today at (916) 847-7263 to learn more.

3 Events that Affect Mortgage Interest Rates

January 20, 2021 by Cindy Steelman

Home Buying Tips in Roseville California

Given the sky-high prices of property nowadays, it’s nearly impossible to buy one without taking a home loan in Roseville. However, there are many aspects you’ll need to consider when applying for a mortgage, especially the interest rate. Although it may be a small percentage, it can often spell the difference between an affordable loan you’ll repay completely in the promised timeframe or a costly loan that almost bankrupts you. It also dictates whether you can buy a house at all. With so many details depending on interest rates, you’ll want to understand what affects this figure.

Mortgage Rates in Roseville California

Factors like your credit history and your down payment contribute to how much your interest rate will be, but other hidden elements influence it to a significant degree.

Here are three events that affect mortgage interest rates:

Presidential Elections. Uncertainty causes the stock market to fluctuate, which can affect mortgage interest rates. It also tends to follow presidential elections, as a new president from a different party can bring many changes to the economy. While elections occur every four years, the possibility of change is enough to make the stock market volatile. As such, there tends to be a drop in the stock market. Investors then start to trade in stocks for U.S. treasuries instead, causing mortgage rates to fall. Generally speaking, that’s a good time to apply for a mortgage if you’re gunning for the lowest interest rates possible, but it’s best to consult with a mortgage broker in Roseville first. When the economy recovers and does well, mortgage rates tend to increase since there are less insecurity and more confidence from investors and the general public.
Pandemics. As you have witnessed during this time, global pandemics have upset hundreds of economies and caused thousands of businesses to shutter permanently. Since uncertainty plays a crucial role in determining interest rates, it comes as no surprise that pandemics—which bring plenty of insecurity and instability to the world—also affect them. As transmission rates rise and outbreaks continue to occur in hotspots, people will feel scared and uncertain, causing rate drops. Until the situation improves and the general public has easy access to a widely available vaccine, mortgage rates are expected to stay low.
Catastrophes and Natural Disasters. When natural disasters strike, whether it’s a ravaging wildfire, a sudden earthquake, or a severe hurricane, it wreaks unspeakable damage to cities and entire states. As people spend their resources to rebuild their communities and recover their losses, it inadvertently creates an economic burden that impacts employment and many other industries. It also affects the area’s local businesses and GDP, influencing mortgage rates. A natural disaster can also interrupt normal mortgage processes, affect property sales, and disrupt the construction industry. Suppliers may no longer be able to transport construction materials. People will no longer afford new homes because of the catastrophe, and lenders may even have had to freeze loans because of the incurred damage. Any delay in funding will cost these mortgage brokers, who will be busy confirming the status of funded loans, which they cannot sell in the meantime. With so much uncertainty—which is a recurring theme—and destruction, mortgage rates are sure to drop.

Buying a Home or Refinancing with Steelman Mortgages

Uncertainty and insecurity are common factors that cause mortgage rates to decline or increase, which can be found in these notable events. If you’re hoping to get the lowest possible rates, applying for a mortgage when any of these three events occur may give you your best chance. However, it’s always best to work with a mortgage broker to make sure you’re aware of the loan’s terms and conditions! Steelman Mortgages is a mortgage broker in Roseville that makes buying a home or refinancing your mortgage a smooth, simple, and enjoyable process. We can connect you with conventional loans, FHA loans, VA loans, jumbo loans, first time home buyer loans, and many more. Find out how we can help you by contacting us at (916) 847-7263!

2 Common Mortgage Types: Which Option Do You Choose?

Buy a Home Tips in Roseville, CA

Mortgage Broker in Roseville: Steelman Mortgages

3 Things to Avoid at All Costs During the Home Purchase Process

Things to Avoid During Home Purchase Process

Work with the Best Mortgage Lender in Roseville

3 Events that Affect Mortgage Interest Rates

Mortgage Rates in Roseville California

Buying a Home or Refinancing with Steelman Mortgages

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